Official blog of the Sacramento Progressive Alliance, one of the largest and most vibrant progressive activist groups in California with more than 8,000 members. We educate and mobilize Progressives in Sacramento, the surrounding foothill areas, and at Sac State and Folsom Lake College.

Saturday, July 27, 2013

California Taxes the rich to pay for schools

The
Yes on 30 campaign won higher taxes for rich Californians, winning 55
percent to 45 percent. Even though polling showed that people were
willing to vote for higher taxes on the rich, the governor kept talking
about "shared sacrifice." Photo: Steve Rhodes.

“There is no alternative to austerity,” insist the rich, along with their politicians, foundations, think tanks, and media.
They’ve
been saying it for decades. “Taxes are bad,” they also claim.
“Government doesn’t work. And public employees are greedy.”
Consequently,
common wisdom had it that “you can’t raise taxes.” Even people who
should have known better believed this—while the public sector slid down
the tubes.
So how did Proposition 30 succeed? This measure,
passed by voters last November, raises $6 billion a year for schools and
services—in California, a supposedly “anti-tax” state. The money comes
mostly through an income tax hike on rich people, along with a tiny
sales tax increase of ¼ percent.
The story should be better known, because with the right preparation, you could make it happen in your state, too.

TESTING THE WATERS

Shortly
after Democrat Jerry Brown was elected governor in November 2010, the
California Federation of Teachers (CFT) pulled together labor and
community groups to craft a ballot measure to raise the revenue needed
to keep schools and services afloat.
For two years we had been
laying the groundwork for a progressive tax: creating educational
materials, publishing opinion pieces, holding training sessions with our
members and other unionists, and talking with potential coalition
partners.
We funded polls and focus groups, testing how likely various types of taxes would be to gain a majority.
Regressive
taxes—like sales taxes and across-the-board income tax hikes—were
viewed unfavorably. By spring 2011, people felt ordinary folks had
already sacrificed enough, in the worst recession since the 1930s.
The
public believed, however, that the rich and large corporations needed
to pay their fair share for the common good. They were quite willing to
vote for higher taxes on the rich.
As we refined our research, we
decided on three principles: bring in the most revenue possible; draw it
from those who could most afford to pay; and have the best chance of
winning. We arrived at a Millionaires Tax: people who made a million
dollars a year would pay an extra 3 percent, and people making $2
million an extra 5 percent, raising $5 billion a year.
Unfortunately,
Governor Brown had his own proposal that didn’t follow those
principles—it included both a half-cent sales tax hike and an
across-the-board income tax increase. People were out gathering
signatures for Brown’s initiative, our Millionaires Tax, and a third tax
measure sponsored by a wealthy liberal attorney.
The Millionaires Tax ran ahead of the other measures in five straight polls.
In
early March 2012, the CFT helped organize a march in the capital
against budget cuts and college tuition increases. Thousands of
students, faculty, and others paraded Millionaires Tax signs outside the
governor’s window.
Two days later, responding to the governor’s
charge that three competing measures would all lose, we released the
results of a poll testing that idea. It found the others would get less
than 50 percent, and the Millionaires Tax would win handily.
At
that point the governor called in CFT President Joshua Pechthalt to
talk. We compromised and combined the two proposals into Prop 30. The
new measure raised the top tax rates on income of $250,000 by 1 percent,
on $300,000 by 2 percent, and on $500,000 by 3 percent. We had wanted a
permanent tax; Brown’s was for five years. The compromise extended that
to seven.
We knew the sales tax was a poison pill and we
requested that Brown drop it entirely, but he explained that, to keep
the Chamber of Commerce neutral, he had promised not to “demonize the
rich,” meaning there had to be a “shared sacrifice” component. He did
agree to reduce it to a quarter cent.

SALES TAX CONFUSION

Our
research was validated during the campaign—people don’t like regressive
taxes like the sales tax. Millions of dollars in opposition ads did
their best to confuse the voters, calling Prop 30 “a massive tax
increase on everyone.”
CFT’s coalition, Reclaiming California’s
Future, included the Alliance of Californians for Community Empowerment
(which emerged after ACORN’s demise), Courage Campaign, and California
Calls, a coalition of community groups dedicated to reforming the tax
system through voter education and expanding the electorate.
Our
coalition emphasized the “tax the rich” message in our literature,
public events, and door-to-door canvassing, but we were only part of a
much broader Prop 30 coalition. The official campaign’s TV ads included
asking the wealthy to pay their fair share, but as one message buried
among others.
The polling numbers gradually sank to a bare 50
percent. One poll, three weeks before the election, had Yes on Prop 30
at just 48 percent; the No’s had crept up to 44 percent.
The
governor campaigned mostly on the idea that Prop 30 would save education
from further cuts, but threw in “shared sacrifice” and “paying down the
state’s wall of debt” in his public pronouncements.
We agreed
with the education message, disagreed with the others, and insisted on a
strong emphasis on taxing the rich. We stressed to the governor that,
in order to neutralize the opposition’s ads, the public had to
understand what services the tax paid for, who it taxed, and by how
much.
In the final weeks, as the governor worked with CFT and
other allies in rallies and media appearances, his message became
clearer and more consistent: Prop 30 would stop cuts to schools and was
fair, because, he said (drawing on his Jesuit background and citing St.
Luke), it asked “those who are blessed with the most wealth to give back
a little bit so everyone could benefit.”
Ninety percent of Prop
30’s revenues would come from taxing the wealthy; and the quarter-cent
sales tax, he said, amounted to a “mere penny on a $4 sandwich.”

RESHAPE DEBATE

On
Election Day, Prop 30 won 55 percent to 45 percent, reshaping the
decades-old understanding of California as an “anti-tax” state. It is
the single largest progressive tax passed in the state since World War
II, both in the amount of revenue raised and as a percent bump on the
income taxes of the wealthy.
What are some lessons from this tremendous victory?
If
the word can be gotten out effectively, the electorate is ready to pass
progressive taxes to pay for common needs like schools and services.
Demographic
changes favoring a clear progressive message, coupled with the Occupy
movement’s lasting insight that the 1 percent are robbing the rest of us
blind, provide the opening to beat back the core conservative idea:
that the problem is government and society should seek help from the
wisdom of the rich.
Prop 30’s message was that public education is
the foundation of a decent society and we can restore that promise if
the rich pay their fair share of taxes.
The anti-Prop 30 messages
were the same as always—government can’t do anything right; the rich
will leave California if we tax them; taxes are too high; if we remove
the waste, fraud, and abuse in government there will be plenty of money
for schools.
But these ideas, so effective in the past, had lost
their potency, because, especially post-Occupy, the public understands
that economic inequality is growing.
Spending tens of millions of
dollars didn’t work for the rich this time. In fact, it backfired—they
proved our point. We didn’t have to “demonize” the rich; they did it
themselves.
Another key, of course, was the old-fashioned work of
reaching out to core constituencies. The Reclaiming coalition was
crucial, along with a ground campaign by the broader labor movement,
which was heavily mobilized to fight an anti-union measure on the ballot
(which lost).
Volunteers and staff spent countless hours knocking
on doors, phone banking, rallying, educating. We reached out
systematically to less-likely voters—young people, college students,
immigrants, lower-income communities of color—and convinced them to come
out to vote for their own futures.
Credit for this orientation is
due especially to California Calls, which has targeted less-likely
voters and stayed in touch over several election cycles.
This year
California has begun to restore funds for public education for the
first time in years. There is an alternative to austerity; its name is
“progressive taxes.”

Fred Glass is California Federation of Teachers communications director. This post first appeared on the Labor Noteswebsite and a print version of this article appeared in Labor Notes #412, July 2013.

Editors note. The Sacramento Progressive Alliance worked hard to help pass Prop.30. Thank you for your support.

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Welcome to the PROGRESSIVE ALLIANCE. We are a multi-racial, multi-issue "rainbow coalition" dedicated to social justice, peace and building progressive power. Our key priorities include economic justice; equal rights and equal opportunities for all regardless of race, gender, or sexual orientation; international solidarity; humanitarian service; eradicating poverty at home and abroad; environmental protection and sustainable development; and electing progressives to public office and then holding them accountable.

Founded in 2005, we have grown to more than 7,000 members and have emerged as one of the largest and most grassroots activist groups in California. We are proud to serve as a local chapter Our Revolution, the national movement inspired by Bernie Sanders' historic 2016 Presidential Campaign, and as a local affiliate of United for Peace & Justice (UFPJ), a network of several hundred peace and justice groups from all over the world.

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